Dave and Hannah Cree have always been active in social causes. But after the 2013 Calgary flood, the family had to move out of their home. “The outpouring of help really hit us,” Hannah says. “But we also realized that there are people who are homeless every night.”

Dave already had previous exposure to the trials of the disadvantaged. As part of a leadership course a few years ago, he had to be homeless for a day on the streets of Edmonton. “That absolutely changed how I viewed homelessness.”

They decided to take the leap and build a business venture to help the homeless get a leg up in the world. Called CMNGD (CommonGood) Linens, the company provides laundry services to local restaurants, employing homeless and other disadvantaged people who need an opportunity to gain useful employment.

Dave and Hannah Cree at their laundromat.Courtesy CMNGD

They came across a homeless charity that was using the laundry facilities for rehabilitation purposes. “When we saw that, we knew there was a way to create a disruptive and recurring revenue business model that was stable and could scale,” Hannah says. “So we dissected that model and started talking to restaurants to understand their pain points.”

In June of 2016 they launched their business on ATB (Alberta Treasury Board) BoostR, and by September had several investors. They started out using the commercial laundry facilities in the basement of the Calgary Drop-in & Rehab Centre. They now have their own laundry warehouse where they hire six to seven employees at any given time.

The next step is to expand across Canada through partnering with Executive Mat to use their warehouses for laundry services.

Having been involved in the startup scene as an advisor, Hannah says creating and sustaining revenue streams is the piece that social entrepreneurs don’t often think about. “That’s where you see business models fall apart. We want to do good and we all mean well. But you have to have a financial model to support it. Yes restaurants are strong supporters within the community and they love the story, but we still have to be competitive with our service.”

Social enterprises often struggle with having a viable business model, says Richelle Matthews, program manager with CTI (Calgary Technologies Inc.), a regional innovation hub. “But the reality is, they have to be just as investment ready as any other company.”

Terry Rock, president CEO of CTI, agrees. “We see a lot of challenges when people think customers will pay more for the social benefit. That’s a difficult case to make.”

Brandon Waardenburg is the co-founder of Good Trade Co., a Calgary-based direct trade coffee company that supports farmers in Colombia and the local economy. So far he says, the value proposition has resonated well with customers.

Be very clear on what your value proposition is, and ensure you have customers willing to pay for that. Social entrepreneurs can get caught up in the impact of what they are doing, but if no one is willing to pay, they won’t have a business

Richelle Matthews, program manager, CTI

He based his concept on something he heard a decade ago when a Nigerian businessman came in to speak. “He said, we don’t need your money. We need your trade and to build an economic relationship. That stuck with me for 10 years.”

In 2016 he and his co-founder put their plan into action. He originally intended Good Trade to be a non-profit enterprise, but soon discovered that financial institutions weren’t willing to fund it. “We couldn’t even get a credit card or line of credit. So we switched to a for-profit model and within the week had a card and a $20,000 line of credit in hand.”

A crowdfunding campaign gave them the seed money they needed in 2016. Since then it has been self-funded. The founders buy their coffee from a group of small-hold Colombian farmers, teaching their families basic business skills and financial literacy, among other life skills in exchange.

“We’re growing at a slow and steady pace, he reports. “At the moment, Calgary is our market. We are getting lots of access to new contacts looking for a socially conscious brand that goes beyond what others are doing,” he says. “Coffee customers are a well-educated bunch that are interested in social issues, so we find it’s been easy for them to understand our proposition.”

For social entrepreneurs to succeed, they must find the balance between their company’s social impact and their business, Matthews advises. “What I always say to entrepreneurs is to be very clear on what your value proposition is, and ensure you have customers that are willing to pay for that. Social entrepreneurs can get caught up in the impact of what they are doing, but if no one is willing to pay, they won’t have a business.”

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